Will Gold Test $3000 In 2024?

Many traders waited for the strong pullback in gold to initiate their long positions. However, gold does not provide such opportunitites this year.

The first notable pullback happened in April, when spot gold touched the $2430 level before moving towards $2285. Those who missed this opportunity had a second chance in June as gold briefly visited sub-$2300 levels.

However, many observers believed that gold should move below $2200 after rising non-stop from the lows near the $1800 level, which were reached in October 2023. In reality, those who refused to buy near $2300, hoping for a better price, are now looking at the price of gold moving towards the $2700 level.

Taking a look at official reports, China’s central bank may be among those who have waited for a pullback and never got one. Sure, the market is always full of rumors indicating China is still buying gold despite saying otherwise in its reports, but these rumors cannot be proved.

Private investors are also late to the party. Flows in gold ETFs have just turned positive on a year-to-date basis, which means that an average investor has missed the rally.

As the price of gold did not experience material pullbacks in 2024, demand remained strong despite fluctuations in Treasury yields, U.S. dollar or Fed policy outlook.

Put simply, it means that global central banks were buying gold to diversify their assets, and these purchases had little correlation with the price of gold.

In case investment funds and retail investors start increasing their exposure to gold, they would push prices to new highs as central bank demand will likely remain stable in the upcoming years.

In this light, the test of the $3000 level is a highly probable scenario. However, it remains to be seen whether gold has enough time to reach $3000 before the New Year.

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